Business pains in Vietnam

IF YOU go to Cong's pavement café in Danang, you may have to hang on tightly to your seat. The police, you see, come by almost every other day to enforce their ban against street cafés—by taking whatever furniture they can lay their hands on. When Mr Cong sees them coming, he simply throws all his plastic chairs and tables into the river, which runs alongside. Later he jumps in to retrieve them. “The police are afraid to go in,” he laughs. Mr Cong is getting good at the furniture toss: last month he lost only eight chairs.

Such is business life in Vietnam. For many, being unmolested is still too much to hope for. In a regional survey released this week, the country managed to top Indonesia as the most corrupt in Asia. But as the state continues to reduce its role in the economy, people are gaining more latitude to do as they please, even in areas far removed from the hustle and bustle around Ho Chi Minh City. One change that has made this possible is a new enterprise law passed last year that makes it far easier for Vietnamese companies to register and get licences to do business.

Boosters claim the Communist Party genuinely wants to loosen its hold and point to all the new firms that have been signed up under the law. Some of that activity is no doubt exaggerated. At a craft shop in Hoi An, another central Vietnamese coastal town about 30km (19 miles) from Danang, the manager says that his shop has been carving furniture for export since 1993. But only last month local officials came by to say that the shop was actually an enterprise, and needed to be registered. Because private enterprise has been slowly gaining ground since the first wave of reforms, called doi moi, in 1986, it is hard to gauge how many “new” companies are being created in this way.

Nevertheless, the role of the state in economic life is being gradually rolled back. One of the most commonly cited statistics about Vietnam is the gap between the 1.4m jobs the country will need to create every year and the 1.1m it is generating at present. Differences of opinion among the leadership about liberalisation remain, but the commitment to the private sector seems firm.

Vietnam opened a stockmarket in Ho Chi Minh City last year, even if it is kept on a tight leash. The country has negotiated a trade deal with the United States, which should be ratified this year. It has already merged or privatised thousands of state-owned firms, though most are minnows. Despite all this, Vietnam will remain a poor, gradually improving, mainly rural country for the foreseeable future. But if the private sector continues to grab a hold, even the police will eventually find something better to do. There is a rumour that they have opened their own café in Danang. They may not know much about business, but by now they have plenty of chairs.